Enhancing financial fraud detection using adaptive machine learning models and business analytics

Abstract

Financial fraud continues to be a critical threat to businesses and economies worldwide, necessitating advanced detection techniques. This paper reviews the role of adaptive machine learning (ML) models and business analytics in enhancing fraud detection systems. Traditional fraud detection methods often fall short in addressing the complexity and evolving nature of fraudulent activities, making adaptive ML models, such as decision trees and neural networks, more effective in identifying subtle patterns in large datasets. Organizations can refine ML models by integrating business analytics, ensuring real-time detection and continuous improvement of fraud detection systems. The paper also explores the challenges in deploying these technologies, including data privacy concerns and model accuracy, as well as the potential impact of emerging technologies such as blockchain and quantum computing. Future directions emphasize improving the interpretability of ML models and leveraging multi-modal data for a more holistic approach to fraud prevention. The synergy between adaptive machine learning and business analytics promises a more resilient and effective framework for combating financial fraud.